EU allows 8.5 percent appreciation of Slovak koruna against euro

The European Union decided on Friday to allow an 8.5 percent appreciation of the Slovak koruna against the euro.

The so-called central rate of the koruna against the euro under the EU exchange rate mechanism, known as ERM II, will be raised from 38.455 to 35.4424 as from March 19, with a fluctuation band of plus or minus 15 percent.

The revaluation "will support the authorities by maintaining macroeconomic stability," based on a firm commitment by the Slovak government to pursue appropriate supportive policies, the European Union said in a statement.

Slovakia aims to be the next country to adopt the euro following Slovenia on Jan. 1. A stable exchange rate, demonstrated by its participation in ERM II for two years without severe tension, and the exchange rate remaining close to the central rate, are both pre-conditions to joining the euro zone.

The koruna has gained ten percent against the euro in the past year, more than any other currency, due to the country's outstanding economic performance. The Slovak central bank intervened last week to contain the rise of the koruna as the currency broke through the psychological barrier of 34 koruna to the euro.

Source: Xinhua